Customer Reviews

Leveraged Finance: Concepts, Methods, and Trading of High-Yield Bonds, Loans, and Derivatives (Frank J. Fabozzi Series)

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The book was written in early 2009, just as the market was plumbing new multiyear lows. Perhaps because of this, the authors are careful not to offer any predictions as to the future. Instead the book is timely, in that it explains CLOs and CDSs to a reader unacquainted with them.

We are reminded that CLOs have been around 20 years, which includes the 90-1 and 2001 recessions. These were not generally implicated as causes of those events. But CLOs and their sisters, the CDSs, were common funding events in recent years. The text describes how these were typically made out of simpler financial constructs.

Unsurprisingly considering when the book was written, there is an extensive discussion about the default rates. Of course these are historical, and the reader should appreciate that the severity of the current recession might well yield higher defaults.

Generally the maths is kept at a necessary minimum; just enough to illustrate the concepts.

As a practitioner, i found this author's approach authoritative and approachable. The subject matter was well organized and fully detailed, yet it was also readable. This is a book that can function as a great intro to Lev Fin for the average or advanced investor.

It's a must read for those interested in Lev Fin, CLO's, and High Yield. Great thoughts and great perspective from some of the greatest minds in this space.